A court-appointed receiver for Northland Center sees few options left for historic mall.

SOUTHFIELD – Stripped of its last anchor stores and losing nearly $250,000 every month, the entire Northland Center mall is now in danger of shutting down.

The Southfield mall defaulted on a $31-million loan last year, and its court-appointed receiver is seeking permission to evict the few remaining tenants and board up the property. Northland opened in 1954 as one of the nation's first major suburban malls.

Oakland County Circuit Judge Wendy Potts is to consider the closure request at a hearing scheduled for Wednesday. If the judge grants permission — and no 11th-hour buyer steps forward — tenants could be sent 30-day notices and the mall could close by late April or early May.

"The unpleasant economic reality is that Northland Mall is insolvent and unable to pay basic operational expenses," attorney John Polderman, an attorney for the court-appointed receiver Frank Simon, wrote in a recent court motion. "There is simply no way to justify or fund continued operations absent a multimillion-dollar cash infusion."

In an interview Monday, Polderman told the Free Press that there are potential buyers of the property, including some that might keep Northland open as an enclosed mall. He did not name the interested parties, although court filings identify the City of Southfield as one interested potential suitor.

Southfield spokesman Michael Manion said he couldn't speak to any possible bid by the city for the mall, but said officials are "optimistic that this important section of Southfield will be revitalized by new development or redevelopment efforts in the near future."

Downward spiral

Northland Center has been on a downward trend for years that accelerated last fall as the property slipped into receivership and its next-to-last anchor store, Target, announced it would pull out after Christmas. Now more than half empty, the mall will lose its final anchor store next month when Macy's turns out the lights.

The appointed receiver described in court filings how Northland is losing nearly $250,000 each month that it remains open and faces mechanical equipment or structural failures on an almost weekly basis.

It could cost over $6 million or more to restore Northland to "a functioning shopping mall." And that figure does not include the more than $3 million in unpaid bills that Northland amassed through the years, including $700,000 in overdue water bills.

"Of the current tenants, almost half fail to timely pay their rent, with another substantial portion having sizable arrearages, some of which go back as far as 2005," Polderman wrote. "Many tenants simply refuse to pay any arrears and offer a variety of excuses."

Northland Mall has been in receivership since September, following its default on a $31-million loan from 2005 that was to come due this year with a massive balloon payment. More than $27 million on the loan is outstanding, according to court documents.

Northland Center’s next-to-last anchor store, Target, is already closed and boarded up. The mall is now more than half empty.(Photo: Regina H. Boone/Michigan.com)

The mall has been owned since late 2008 by a subsidiary of New York-based Ashkenazy Acquisition, which also owns Eastland Center mall.

A lawyer for the mall's lenders has blamed Ashkenazy for Northland's financial and physical deterioration.

"Given the current conditions of the property, which reflects the utter lack of care that even a careless shopping mall owner should have employed, the lender is unwilling to commit any further financial resources to keeping the property open as a shopping mall," attorney James Allen of Miller, Canfield, Paddock and Stone wrote in a January court filing.

Ashkenazy's lawyers have objected in court filings to shutting down Northland, calling it an "extreme measure."

Closing the mall "will divest the community of an iconic landmark, which provides jobs and tax revenues ... if the receiver's (request) is granted, the property will undoubtedly remain unoccupied and unused for the foreseeable future, providing no benefit to the surrounding area."

Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com.

What's wrong with Northland Center mall?

■Will lack anchor stores once Macy's closes next month

■Mall's monthly expenses exceed revenues by $247,609

■Almost half of the remaining tenants don't pay rent on time.

■Mall's roof is beyond its useful life and has "numerous" leaks, necessitating $5.6 million in repairs.

■The water tower is broken and needs an estimated $445,000 in repairs.